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Global stocks extended their positive streak in April, adding a fourth month, with some regional benchmarks reaching record highs, as the outlook for the world’s economy improved and a majority of companies’ earnings beat estimates.

The STOXX® Global 1800 Index rose 3.5% in dollar terms1 during the month, after wrapping up in March its best calendar quarter since 2010. The global index has recouped nearly all of the loss from the fourth quarter of 2018 and is now just 1.1% away from a record high, when including the effect of dividend payments.

The US economy was shown to be on an even stronger footing than many expected. The Department of Commerce said Apr. 26 that the economy grew 3.2% in the first quarter, topping economists’ forecast of 2.3%.2 There was also reassuring news from China, where gauges of manufacturing activity, gross domestic product (GDP) and exports also beat estimates.

Even in the Eurozone the outlook could be getting rosier. Eurostat said Apr. 30 that GDP growth for the nations sharing the euro accelerated in the first quarter to 0.4% from 0.2% in the last three months of 2018.

Earnings delivering positive surprises

Of the 229 companies in the Standard & Poor’s 500 Index that reported first-quarter earnings through Apr. 26, more than 77% exceeded analysts’ expectations, according to Refinitiv.3 That compares to a long-term average of 65%. For the pan-European STOXX® Europe 600 Index, 58% of the companies that reported earnings topped estimates, Refinitiv said,4 more than the average 50% that do so historically.

Europe, North American markets reach record

The STOXX Europe 600 Index advanced 3.8% in euros during April, breaking a record high including dividends. Meanwhile, the Eurozone’s EURO STOXX 50® Index jumped 5.3%. It was the fourth monthly gain for both indices, their longest positive streak since May 2017.

Calm descended upon markets during the month. The average daily move for the EURO STOXX 50 was 0.2%, while a measure of annualized volatility for the Eurozone gauge fell to 6.3%, its fourth-lowest monthly reading since inception.

All but one of the 25 developed markets tracked by STOXX gained during the month when measured in either dollars or euros. The STOXX® New Zealand Total Market Index dropped 0.5% in euros and 0.7% in dollars, after topping the performance ranking in March. The STOXX® Developed Markets 2400 Index added 3.7% in euros, achieving a record high, and 3.5% in dollar terms.

Within income strategies, the STOXX® Global Maximum Dividend 40 Index, a measure of the world’s highest-dividend shares, jumped 6.7%. It was its strongest outperformance compared to the STOXX Global 1800 Index since December 2016.

In the thematics space, the STOXX® Global Smart Factory Index stood out with a 10.6% advance. The index, which was introduced in February this year, offers exposure to companies benefitting the most from the advancement of digitalization and new technologies in factories.